The stage is set for the Euro-drama of our time. We know that giving effect to the UK's vote for Brexit could require as many as four sets of distinct but closely linked negotiations, or...01 August 2016
Judicial Review reforms receive Royal Assent
The key changes
The "highly likely" test
Section 84 of the Act amends the Senior Courts Act 1981 (the "SCA") such that the court must refuse to grant relief on an application for judicial review:
"if it appears to the court to be highly likely that the outcome for the applicant would not have been substantially different if the conduct complained of had not occurred".
The court must consider this question if the defendant asks it to do so.
The court may, however, disregard this requirement if there is an "exceptional public interest" (this is not defined and, as noted in the parliamentary debate, it is not a term that appears in any other statutory provision).
Information about financial resources
Section 85 further amends the SCA to provide that the court may not grant permission unless the applicant has provided the court with certain information – to be specified in court rules – about the source, nature and extent of financial resources available to the applicant in connection with the application. A company that is unable to demonstrate that it is likely to have the required financial resources must instead provide the court with information about its members and their ability to provide financial support for the application.
Under section 87 of the Act, it will no longer be possible for an intervener to recover its costs from a party to judicial review proceedings unless "exceptional circumstances" apply.
By contrast, an intervener may be ordered to pay the costs incurred by a party to the proceedings as a result of the intervention. The court must (again, unless exceptional circumstances apply) make such a costs order against the intervener where: (i) the intervener has acted, in substance, as the sole or principal applicant, defendant, appellant or respondent; (ii) the intervener's evidence has not significantly assisted the court; (iii) a significant part of the intervener's evidence relates to matters that the court need not consider to resolve the issues in the proceedings; or (iv) the intervener has behaved unreasonably.
The factors to be taken into account in determining if there are "exceptional circumstances" are to be specified in court rules.
Cost capping orders
The Act alters the common law position on protective cost orders (referred to as "cost capping orders" in the Act), which limit or remove a party's liability to pay another party's costs in judicial review proceedings. Under section 88 of the Act, the court may only make a cost capping order if permission for judicial review has already been granted and if: (i) the proceedings are "public interest proceedings"; (ii) in the absence of the order, the applicant would withdraw the application for judicial review; and (iii) it would be reasonable for the applicant to do so.
Proceedings will be "public interest proceedings" only if: (i) they concern an issue of general public importance; (ii) the public interest requires that that issue be resolved; and (iii) the proceedings are likely to provide an appropriate means of resolving it. Further, the court will have regard to: (i) the number of people directly affected by the relief through judicial review; (ii) the significance of the effect on those people; and (iii) whether the proceedings consider a point of law of general public importance, when determining whether proceedings are public interest proceedings.
It is of note that section 88 of the Act contains a "Henry VIII clause" empowering the Lord Chancellor to amend through regulations the matters to which the court have must regard in determining this public interest element.
While the impact of the reforms on the number of judicial review claims cannot be predicted with any certainty, the Act undoubtedly introduces – as was always intended – a more restrictive regime.
It will be of particular interest to follow the court's treatment of the "highly likely" test in considering whether to permit an application for judicial review and the level of difficulty that this threshold will impose in practice (for example, whether a majority of defendants will seek to rely on it, and whether this will lead to a "front-loading" of evidence and costs).
In addition, it is not clear what the practical effect of the new financial resources requirements will be. Might a company – or its shareholders – be required to provide the court with detailed financial statements up front, or perhaps make a payment into court to cover future costs?
Given the restrictive rules on interveners' ability to recover their costs and the risk of adverse costs orders, it seems likely that NGOs and charities will be more reluctant to take part in judicial review proceedings.
Moreover, the effect of the reduced access to protective costs orders, in combination with the new rules which restrict the availability of legal aid until after permission has been granted, is likely to be significant for those with limited financial resources. We may therefore see a drop in the number of judicial review claims brought by financially vulnerable claimants.
Overall, it does seem likely that the government will achieve its stated aim of reducing the number of judicial review claims. The key question is whether this reduction will result in the "chilling effect" of which the Act's many critics were so wary.
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